CounterPath Reports First Quarter Fiscal 2021 Financial Results
CounterPath Corporation (NASDAQ:CPAH) reported significant results for Q1 FY2021, with revenue of $3.4 million, a 33% increase from $2.6 million in Q1 FY2020. Recurring revenue saw a remarkable 46% growth, totaling $2.1 million. Gross margin rose to 84% from 80% year-over-year. The company achieved net income of $0.0 million or $0.00 per share, an improvement from a loss of $0.9 million or $0.16 per share in the prior year. Cash increased to $2.7 million from $2.4 million.
- 46% year-over-year growth in recurring revenue to $2.1 million.
- Gross margin increased to 84%, up from 80% year-over-year.
- Net income improved to $0.0 million compared to a loss of $0.9 million in the same quarter last year.
- Operating expenses decreased to $3.1 million from $3.3 million year-over-year.
- Software revenue declined to $0.8 million from $1.0 million year-over-year.
- Interest and other expenses increased to ($0.3) million from ($0.2) million year-over-year.
Year-over-Year Recurring Revenue Growth of
VANCOUVER, BC / ACCESSWIRE / September 10, 2020 / CounterPath Corporation (NASDAQ:CPAH) (TSX:PATH) (the "Company" or "CounterPath"), a global provider of award-winning Unified Communications and Collaboration (UCC) solutions for enterprises and service providers, today announced the financial and operating results for its first quarter ended July 31, 2020.
First Quarter Fiscal 2021 Financial Highlights (unaudited)
- Revenue of
$3.4 million for the first quarter of fiscal 2021, an increase of33% compared to revenue of$2.6 million for the first quarter of fiscal 2020. - Subscription, support and maintenance revenue (revenue of a recurring nature) for the first quarter of fiscal 2021 grew by
46% year-over-year to$2.1 million . - Billings (revenue plus change in deferred revenue) increased by
42% to$3.6 million for the first quarter of fiscal 2021, compared to$2.5 million for the first quarter of fiscal 2020. - Gross margin of
84% in the first quarter of fiscal 2021, compared to gross margin of80% in the first quarter of fiscal 2020. - Income from operations of
$0.3 million for the first quarter of fiscal 2021, compared to loss from operations of$0.7 million for the first quarter of fiscal 2020. - Non-GAAP income from operations of
$0.4 million for the first quarter of fiscal 2021, compared to non-GAAP loss from operations of$0.6 million for the first quarter of fiscal 2020. - Net income of
$0.0 million , or$0.00 per share for the first quarter of fiscal 2021, compared to net loss of$0.9 million , or$0.16 per share, for the first quarter of fiscal 2020. - Non-GAAP net income of
$0.3 million , or$0.04 per share for the first quarter of fiscal 2021, compared to non-GAAP net loss of$0.7 million , or$0.12 per share, for the first quarter of fiscal 2020. - Cash of
$2.7 million as of July 31, 2020 compared to$2.4 million as of April 30, 2020.
Management Commentary
"I'm proud of our team as we posted another strong quarter and furthered our goal of increasing our recurring revenue," said David Karp, CEO. "With recurring revenue (subscriptions, support, and maintenance) growing
"The unified communications market is large and incredibly dynamic, and CounterPath holds a strong position in the softphone category. We excel in areas where customers want to leverage existing networks and where deployments are challenging and require unique features, reliable security, and interoperability. We are focused on certain vertical markets to maximize our applications' value, such as within the health care, retail, call center, and financial markets. We will continue to market our offerings to these higher value verticals over the fiscal year," continued Karp.
"While there remains uncertainty due to the current disruptions to the economy, we have benefitted from work-from-home initiatives undertaken as a result of the COVID-19 pandemic," said Karp. "Our pipeline for the current quarter remains steady, and we expect again to see revenue growth over the comparable period last year."
Recent Business Highlights
- On June 11, 2020, the Company announced the completion of a
$1.0 million private placement at$3.51 per common share. - On June 15, 2020, the Company repaid
$2.0 million of its outstanding loan principal of$4.0 million . - During the quarter, the Company announced that its Bria Enterprise solution has been deployed by UniVista Insurance to facilitate call center communications and by Genesis Financial Solutions' Virtual Desktop Infrastructure to transition to a new remote working environment.
- On July 7, 2020, the Company's Bria Teams collaboration solution was selected to provide the Maine School Administrative District #60 as a work-from-home communication solution.
- On August 20, 2020, the Company announced a partnership with TigerTMS to develop a custom-branded Bria and Stretto Platform solution to replace hotel room phones in the hospitality industry.
- On August 28, 2020, the Company announced a
$5.0 million at-the-market equity offering program. - On September 1, 2020, the Company announced a partnership with Telico to provide a UC solution to its customers and resellers.
Financial Overview
(All amounts in U.S. dollars and in accordance with accounting principles generally accepted in the United States ("GAAP") unless otherwise specified - unaudited).
Revenue was
Operating expenses for the quarter ended July 31, 2020 were
Interest and other income (expense), net for the quarter ended July 31, 2020, was (
Net income for the quarter ended July 31, 2020 was
Forward-Looking Statements
This news release contains "forward-looking statements". Statements in this news release which are not purely historical are forward-looking statements and include any statements regarding beliefs, plans, outlook, expectations or intentions regarding the future, including the statement that (1) offering the Company's software through subscriptions allows it to stay engaged with its customers and grow with them as they deploy its communication software and services; (2) subscriptions for the Company's software increases the lifetime value of the customer; (3) the Company will continue to market its offerings to these higher value verticals over the fiscal year; and (4) the Company's pipeline remains steady, and for the coming quarter, the Company expects to again see revenue growth over the comparable period last year. It is important to note that actual outcomes and the Company's actual results could differ materially from those in such forward-looking statements. Actual results could differ from those projected in any forward-looking statements due to numerous factors. Such factors include, among others: (1) any direct or indirect negative potential impact or harm that COVID-19 may actually have on the Company's business or its potential/current clients' businesses; (2) the lack of cash flow which may affect the Company's ability to continue as a going concern; (3) the variability in the Company's sales from reporting period to reporting period due to extended sales cycles as a result of selling the Company's products through channel partners or the length of time of deployment of the Company's products by its customers; (4) the Company's ability to manage its operating expenses, which may adversely affect its financial condition and ability to continue to operate as a going concern; (5) the Company's ability to remain competitive as other better financed competitors develop and release competitive products; (6) a decline in the Company's stock price or insufficient investor interest in the Company's securities which may impact the Company's ability to raise additional financing as required or may cause the Company to be delisted from a stock exchange on which its common stock trades; (7) the impact of intellectual property litigation that could materially and adversely affect the Company's business; (8) the success by the Company of the sales of its current and new products; (9) the impact of technology changes on the Company's products and industry; (10) the failure to develop new and innovative products using the Company's technologies including the refresh of our Software-as-a Service (SaaS) solution; (11) the potential dilution to shareholders or overhang on the Company's share price of its outstanding stock options; and (12) continuation or acceleration of the work at home movement. Readers should also refer to the risk disclosures outlined in the Company's quarterly reports on Form 10-Q, the Company's annual reports on Form 10-K, and the Company's other disclosure documents filed from time-to-time with the Securities and Exchange Commission at www.sec.gov and the Company's interim and annual filings and other disclosure documents filed from time-to-time on SEDAR at www.sedar.com.
About CounterPath
CounterPath Corporation (NASDAQ: CPAH) is revolutionizing how people communicate in today's modern mobile workforce. Its award-winning Bria solutions for desktop and mobile devices enable organizations to leverage their existing PBX and hosted voice call servers to extend seamless and secure unified communications and collaboration services to users regardless of their location and network. CounterPath technology meets the unique requirements of several industries, including the contact center, retail, warehouse, hospitality, and healthcare verticals. Its solutions are deployed worldwide by 8x8, Airbnb, AmeriSave, Aspect, BT, Citibank, Comcast, Fusion, Fuze, Honeywell, Liberty Global, Windstream and others. Learn more at counterpath.com and follow us on Twitter @counterpath.
Contacts:
David Karp
Chief Executive Officer
dkarp@counterpath.com
(TABLES TO FOLLOW)
COUNTERPATH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Stated in U.S. Dollars)
| July 31, | April 30, | |||||||
| 2020 | 2020 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash | $ | 2,674,216 | $ | 2,433,266 | ||||
Accounts receivable (net of allowance for doubtful accounts of | 1,966,705 | 2,553,714 | ||||||
Deferred sales commission costs - current | 128,279 | 129,946 | ||||||
Prepaid expenses and other current assets | 297,561 | 326,921 | ||||||
Derivative assets | 26,398 | 6,381 | ||||||
Total current assets | 5,093,159 | 5,450,228 | ||||||
Deposits | 85,623 | 82,039 | ||||||
Deferred sales commission costs - non-current | 79,787 | 92,644 | ||||||
Equipment, net | 110,932 | 111,672 | ||||||
Operating lease right-of-use assets | 1,337,974 | 1,370,035 | ||||||
Goodwill | 6,552,000 | 6,323,390 | ||||||
Intangibles and other assets | 227,527 | 225,945 | ||||||
Total Assets | $ | 13,487,002 | $ | 13,655,953 | ||||
Liabilities and Stockholders' Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable and accrued liabilities | $ | 2,259,614 | $ | 2,231,777 | ||||
Loan payable | 209,035 | - | ||||||
Related party loan payable - current | 2,000,000 | 4,000,000 | ||||||
Derivative liability | - | 140,299 | ||||||
Unearned revenue | 3,942,399 | 3,782,400 | ||||||
Operating lease liabilities - current | 307,185 | 293,322 | ||||||
Accrued warranty | 50,344 | 51,545 | ||||||
Total current liabilities | 8,768,577 | 10,499,343 | ||||||
Operating lease liabilities - non-current | 1,061,573 | 1,102,530 | ||||||
Unrecognized tax liability | 9,763 | 9,763 | ||||||
Total liabilities | 9,839,913 | 11,611,636 | ||||||
Stockholders' equity: | ||||||||
Preferred stock, | ||||||||
Authorized: 100,000,000 | ||||||||
Issued and outstanding: July 31, 2020 - nil; April 30, 2020 - nil | - | - | ||||||
Common stock, | ||||||||
Authorized: 10,000,000 | ||||||||
Issued: | ||||||||
July 31, 2020 - 6,411,063; April 30, 2020 - 6,103,612 | 6,411 | 6,104 | ||||||
Additional paid-in capital | 77,133,268 | 76,066,930 | ||||||
Accumulated deficit | (69,653,042 | ) | (69,677,656 | ) | ||||
Accumulated other comprehensive loss - currency translation adjustment | (3,839,548 | ) | (4,351,061 | ) | ||||
Total stockholders' equity | 3,647,089 | 2,044,317 | ||||||
Liabilities and Stockholders' Equity | $ | 13,487,002 | $ | 13,655,953 | ||||
COUNTERPATH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Stated in U.S. Dollars)
| Three Months Ended | ||||||||
| July 31, | ||||||||
| 2020 | 2019 | |||||||
Revenue: | ||||||||
Software | $ | 829,685 | $ | 1,009,824 | ||||
Subscription, support and maintenance | 2,082,799 | 1,421,862 | ||||||
Professional services and other | 516,722 | 141,982 | ||||||
Total revenue | 3,429,206 | 2,573,668 | ||||||
Operating expenses: | ||||||||
Cost of sales | 555,889 | 511,360 | ||||||
Sales and marketing | 852,974 | 970,593 | ||||||
Research and development | 1,030,136 | 1,131,848 | ||||||
General and administrative | 709,920 | 644,713 | ||||||
Total operating expenses | 3,148,919 | 3,258,514 | ||||||
Income (loss) from operations | 280,287 | (684,846 | ) | |||||
Interest and other (expense) income, net: | ||||||||
Interest expense, net | (71,205 | ) | (70,573 | ) | ||||
Foreign exchange loss | (346,394 | ) | (174,890 | ) | ||||
Change in fair value of derivative instruments | 161,926 | 586 | ||||||
Total interest and other (expense) income, net | (255,673 | ) | (244,877 | ) | ||||
Net income (loss) for the period | $ | 24,614 | $ | (929,723 | ) | |||
Net income (loss) per share: | ||||||||
Basic | $ | 0.00 | $ | (0.16 | ) | |||
Diluted | $ | 0.00 | $ | (0.16 | ) | |||
Weighted average common shares outstanding: | ||||||||
Basic | 6,273,833 | 5,952,122 | ||||||
Diluted | 7,224,184 | 5,952,122 | ||||||
Non-GAAP Financial Measures
This news release contains "non-GAAP financial measures". The non-GAAP financial measures in this news release consist of non-GAAP income (loss) from operations, which excludes non-cash stock-based compensation relative to income (loss) from operations calculated in accordance with GAAP. The non-GAAP financial measures also include non-GAAP net income (loss), which excludes non-cash stock-based compensation, foreign exchange loss and gain on change in fair value of derivative instruments relative to net income (loss) calculated in accordance with GAAP. The non-GAAP financial measures in this news release also include billings, which is calculated as revenue recognized plus the change in deferred revenue from the beginning to the end of the applicable period. Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. CounterPath utilizes both GAAP and non-GAAP financial measures to assess what it believes to be its core operating performance and to evaluate and manage its internal business and assist in making financial operating decisions. CounterPath believes that the inclusion of non-GAAP financial measures, together with GAAP measures, provides investors with an alternative presentation useful to investors' understanding of CounterPath's core operating results and trends.
Reconciliation to GAAP
(Unaudited)
| Three Months Ended | ||||||||
| July 31, | ||||||||
| 2020 | 2019 | |||||||
Non-GAAP loss (income) from operations: | ||||||||
GAAP income (loss) from operations | $ | 280,287 | $ | (684,846 | ) | |||
Plus: | ||||||||
Stock-based compensation | 70,183 | 68,341 | ||||||
Non-GAAP income (loss) from operations | $ | 350,470 | $ | (616,505 | ) | |||
| Three Months Ended | ||||||||
| July 31, | ||||||||
| 2020 | 2019 | |||||||
Non-GAAP net income (loss): | ||||||||
GAAP net income (loss) | $ | 24,614 | $ | (929,723 | ) | |||
Plus: | ||||||||
Stock-based compensation | 70,183 | 68,341 | ||||||
Foreign exchange loss | 346,394 | 174,890 | ||||||
Gain on change in fair value of derivative instruments | (161,926 | ) | (586 | ) | ||||
Non-GAAP net income (loss) | $ | 279,265 | $ | (687,078 | ) | |||
GAAP net income (loss) per share: | ||||||||
Basic and diluted | $ | 0.00 | $ | (0.16 | ) | |||
Non-GAAP net income (loss) per share: | ||||||||
Basic and diluted | $ | 0.04 | $ | (0.12 | ) | |||
| Three Months Ended | ||||||||
| July 31, | ||||||||
| 2020 | 2019 | |||||||
Billings: | ||||||||
Revenue | $ | 3,429,206 | $ | 2,573,668 | ||||
Add: Deferred revenue, end of period | 3,942,399 | 2,553,510 | ||||||
Less: Deferred revenue, beginning of period | (3,782,400 | ) | (2,593,726 | ) | ||||
Non-GAAP billings | $ | 3,589,205 | $ | 2,533,452 | ||||
SOURCE: CounterPath Corporation
View source version on accesswire.com:
https://www.accesswire.com/605443/CounterPath-Reports-First-Quarter-Fiscal-2021-Financial-Results
FAQ
What were CounterPath's revenue results for Q1 FY2021?
How much did CounterPath's recurring revenue grow year-over-year?
What was the net income for CounterPath in Q1 2021?
What are the financial highlights of CounterPath for the first quarter of fiscal 2021?
